Monestier files appeal in National Association of Realtors class-action lawsuit
Professor Tanya Monestier does not give up without a fight.
Monestier is pressing her objection to what she argues is a vastly inadequate settlement of a massive class-action lawsuit against the National Association of Realtors (NAR). The settlement awarded approximately $1 billion to home sellers who say the Realtors’ commission structure violated antitrust rules, and the NAR agreed to changes in how agents’ commissions are calculated.
In October the UB Law professor filed an objection with the U.S. District Court for the Western District of Missouri, where the case was filed. She argued that the new consumer protections are insufficient, the plaintiffs’ lawyers’ fees were excessive, and the monetary relief for the tens of millions of people in the affected class is absurd compared to the inflated fees they paid their seller’s agent. But the court overruled her objection.
Now Monestier is appealing those dismissals to the Eighth Circuit Court of Appeals—and she’s doing it all on her own.
UB Law Links asked her to elaborate on the proceedings and her motivation to advocate on behalf of the affected consumers.
Judge Stephen R. Bough overruled your objection and various motions you filed. Are you arguing that his rulings were not correctly based in law?
Yes, I am. I filed a 136-page objection making various arguments, but primarily focusing on why the injunctive relief provided no value to class members. I do not believe that the judge adequately considered these arguments and the proof I provided in support of them. A judge has an obligation to consider all serious objections and provide a “reasoned response” to them. I argue that he failed to do that. And, as a result, he approved a settlement that functionally re-creates the status quo, while assuming it provided immense value to class members.
Your brief contains a section saying that plaintiffs don’t have standing to pursue injunctive relief and therefore the judge did not have the authority to approve the settlement. Can you explain that argument a bit more?
Appellate courts have an obligation to satisfy themselves that the court below had subject matter jurisdiction—i.e., that the court had the power and authority to resolve the case. I argue that the court didn’t have that authority because the named plaintiffs did not have standing to pursue and settle for injunctive relief (what the settlement calls “practice changes”).
Basically, the named plaintiffs were past home sellers. They had standing to sue for the inflated commissions that they paid when they sold their homes. But they did not have standing to pursue forward-looking injunctive relief because they did not allege or demonstrate that they were at “imminent” risk of being harmed again by the defendants’ anti-competitive conduct. They did not allege that they would sell their homes again in the next seven years while the practice changes are in effect, or do so through a NAR-affiliated agent.
Lawsuits and settlements can only resolve actual “cases or controversies.” They can’t purport to change industry rules and then claim that those changes are a benefit to past home sellers. And that is exactly what happened here. If the Eighth Circuit accepts my argument, then they have to invalidate the settlement in its entirety—and we are back to where we were a year and a half ago.
You’re tenacious in carrying your objections to the NAR settlement forward, but there’s no prospect of a monetary payoff. What motivates you to press this fight?
I’m doing this because it feels like it’s the right thing to do. I think class members got the short end of the stick with this settlement. And the lawyers made one-third of a billion dollars. That doesn’t sit well with me. Since I was well positioned in terms of my academic background to understand the settlement and the problems with it, I figured, why not me? I’ve gotten a number of emails from people around the country thanking me for taking this on, and saying that they wanted to object but didn’t feel capable of navigating the system. So, I’m doing this to give voice to those who felt they couldn’t speak up for whatever reason.
The brief asks the court to reverse the settlement because of “ghostwriting.” Can you tell us what you mean by that?
After the final fairness hearing, I learned that the court had sent an email through its courtroom deputy to plaintiffs’ counsel instructing him to prepare the final order for the court. To be clear, the court was asking plaintiffs to draft an order approving their own settlement and their own request for $333 million. The court was in possession of that order during the fairness hearing. The court issued the order drafted by plaintiffs, with a couple of minor changes, the next day.
When I found out about that, I couldn’t believe it. In my view, the basic responsibility of the judge is to consider arguments and rule on them. It should not be outsourcing that responsibility to one side—and certainly not before hearing arguments and without telling all participants what is happening.
Because the final order was largely ghostwritten by the plaintiffs, I argue that the appellate court should reverse and remand to a new judge. Of course, this issue is moot if the Eighth Circuit accepts my standing argument.